February 20, 2012

Samsung Creating Spin-Off Company For Its LCD Televisions

According to recent reports, Samsung has plans to create a spin-off company and shift its focus towards new generation OLED display technology in its new televisions.

The company said that it will launch a spin-off company of its Liquid Crystal Display (LCD) unit as a new corporation on April 1.

“It´s a good decision for Samsung Electronics,” James Song, an analyst at Daewoo Securities Co, told Bloomberg's Jun Yang. “The long-term direction for their display business is going OLED. They can improve efficiency of investment by combining similar businesses.”

The new company will be named Samsung Display Co. and will be set up with $699 million, according to the filing.

Donggun Park, executive vice president and head of Samsung's LCD business, told BBC News that the move will allow the company to make quicker business decisions and respond to the customers' needs faster.

The LCD business has been facing losses over the past year as global TV sales have slowed down. The new company may eventually merge with the Samsung Mobile Display venture, which makes OLED displays, Nam Ki Yung, a Seoul-based spokesman, told Bloomberg.

OLED displays were the talk of the 2012 International Consumer Electronics Show in January, with companies like Sony, Samsung and LG showing off their latest-and-greatest with the technology.

Flat panel industry research company DisplaySearch reports that the OLED display market may grow to over $20 billion by 2018, accounting for about 16 percent of the total panel market worldwide. The research firm also predicts that global sales of LCD TVs will drop 8 percent by 2015.

Samsung's LCD division had an operating loss of $666 million last year as the television market slowed down.

New OLED technology allows televisions to be flatter, and offer a brighter display and clearer picture than LCD technology.

The new technology is mainly used in high-end smartphones, but it is slowly transitioning into larger displays like televisions.

Samsung said in a statement on Monday that it aimed to be more competitive in a rapidly changing market with the new technology.